Binance, one of the largest cryptocurrency exchanges in the world, is now being probed by the Department of Justice (DOJ) on the hypothesis that it could be immersed in money laundering transactions. The investigation will also include inquiries from the Internal Revenue Service (IRS), which recently investigated a number of crypto trading platforms.
Binance surveyed by the US Department of Justice
Today, it was revealed that Binance, one of the world’s most popular cryptocurrency exchanges, is under investigation into transactions involving suspected money laundering, according to a item from Bloomberg. The US Department of Justice (DOJ) will stealthily investigate those with knowledge of the company’s inner workings, due to the confidentiality of the investigation. The investigation will be bolstered by an investigation by Chainalysis, which indicates that more than $ 700 million in illicit funds have passed through the exchange.
The IRS is also involved in the investigation and will investigate possible tax offenses involving the exchange and its clients. Binance is a global company that restricts access to US citizens, allowing Americans to trade using only its alternative Binance US platform. However, Changpeng Zhao, CEO of the exchange, has repeatedly stated that his company does not have a head office because Bitcoin does not have one.
The market reacted badly to this news, with most of the major cryptocurrencies dropping prices by double digits. Bitcoin fell 10% after the news, continuing the negative run it experienced after Tesla announced it would stop accepting bitcoin (BTC) in payment for its vehicles for environmental reasons.
The responses of the exchange
Binance reacted quickly to this news and Jessica Jung, the spokesperson for the firm responded. She said:
We take our legal obligations very seriously and work with regulators and law enforcement. We have worked hard to create a strong compliance program that incorporates the anti-money laundering principles and tools used by financial institutions to detect and deal with suspicious activity.
But this is not the first encounter Binance has with the US justice system. The Commodity Futures Trading Commission (CFTC) is also survey the exchange to see if it has allowed U.S. citizens to trade non-registered derivatives that fall under the institution’s jurisdiction. The CFTC investigation is also ongoing at the time of writing.
Stock exchanges appear to be the next target for regulatory agencies. The executives of Bitmex, another major crypto derivatives exchange, have been indicted with money laundering charges last year.
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